Diego Garcia in the Indian Ocean.
Photograph: US Department of Defense/PA

New Year’s Eve marks the conclusion of a 50-year agreement under which the UK has allowed the US to use the Indian Ocean island of Diego Garcia as a military base. On New Year’s Day the agreement will be rolled over into a new one lasting a further 20 years.

The agreement lay behind the forcible removal of residents from the Chagos Islands, of which Diego Garcia is the main island, triggering a battle for their right to return home that has lasted for half a century.

This month Frankie Bontemps, the chair of the Chagos Islanders Welfare Group, joined with exiles and their descendants to hand in a letter to Downing Street demanding their right to return. Bontemps said the 50-year anniversary was a painful reminder of what they had lost.

“Christmas should be a time to feel secure and happy in our homes and with our families. For Chagossians it marks the 50th anniversary of our expulsion from our homes and homeland to make way for a US airbase,” he said.

“Since being abandoned by the UK government we have been impoverished and neglected by the policies of successive UK governments. Forbidden from returning to our homeland, we continue the fight for humanity, justice and the restoration of our human rights. We have been British citizens for 200 years, but are treated as undesirable aliens. Happy Christmas and peace on Earth to all.”

The government has consistently rejected the Chagossians’ pleas that they should be allowed to resettle on the islands. For the Chagossians’ supporters, the extension of the agreement with the US represents yet another betrayal by the UK.

“It is a missed and wasted opportunity,” said David Snoxell, coordinator of the Chagos Islands all-party parliamentary group and a former British high commissioner to Mauritius. “The end of the 50 years was a deadline to bring the whole thing to an end and enshrine a new UK/US agreement that would confirm the willingness of both parties to allow and facilitate a pilot resettlement, preferably on Diego Garcia.”

Campaigners have pledged to continue fighting for the Chagossians’ right of abode to be recognisedBut the government seems to have little interest in the Chagossians’ demands now that it has decided Diego Garcia should continue to be used exclusively as a military base. In a statement to parliament last month, the foreign minister Alan Duncan defended the UK’s decision to extend the agreement with the US until December 2036.

“In an increasingly dangerous world, the defence facility is used by us and our allies to combat some of the most difficult problems of the 21st century including terrorism, international criminality, instability and piracy,” Duncan said.

A three-year policy review for the government concluded that the Chagossians should not be allowed to return, citing concerns over the cost and long-term viability of resettlement. Ministers had previously accepted that a return as outlined in a Foreign Office-commissioned report by the consultants KPMG was “practically feasible”.

As a form of compensation, the government has offered the Chagossians a support package of £40m spread across 10 years, to be spent on community projects. But exiled community figures living in Britain say the money can never be an adequate alternative to the right to live in their homeland.

The reasons for the UK’s reluctance to allow resettlement are opaque. For its part, the US has never publicly opposed resettlement. The Obama administration did not raise any objections after the Labour leader, Jeremy Corbyn, raised the issue in a meeting with the president.

Snoxell said defence was one of several excuses used down the years by the UK government to justify its decision to block resettlement claims. He accused successive governments of painting a misleading picture of the Chagossians’ claims for resettlement.

In the past it has been argued that the Chagossians were contract labourers from Mauritius and therefore not true natives of the islands. Although this is true of some, the majority of Chagossians are descended from ancestors who were held as slave labour on the islands in the late 18th century.

Previous governments have also claimed that the Chagossians were resettled in Mauritius with generous compensation and resettlement allowances. But their supporters say they were initially dumped at the port of the Mauritius capital, Port Louis, and in a prison in the Seychelles. Any compensation that came their way was meagre and late.

It is questionable how many Chagossians would return if they were allowed. Duncan told parliament that “when it was described what life on the islands would look like”, only 200 said they wished to resettle.

But the parliamentary group said this was unsurprising as the Foreign Office consultation had said they would not be allowed to have visitors.

A further 550 Chagossians expressed a wish to go back if they were allowed visitors and the freedom to travel, taking the total number wanting resettlement to more than 1,500 including the Chagossians’ families.

Snoxell said he could not recall any other issue in the 35 years he had been in the diplomatic service that had “so let down the FCO, undermined our ethical standards, been so carelessly and callously handled and caused so much unnecessary anguish than this one. I still feel ashamed at the way the FCO has over 45 years treated and tricked a people whom the UK had a ‘sacred duty’ to protect.”

Handing in the protest letter to Downing Street this month, Hengride Permal, chair of the Chagos Islands Community Association, made a renewed appeal to the government to let them return home.

“Chagossians are suffering and the Chagossian community has been damaged because of the British government’s actions,” she said. “But the British government has been ignoring us and our rights as British citizens. I want the new prime minister and all MPs to start listening.”